Industry-led skilling is key

SummaryThe country's skill development policy is sketchy, at best, and there is little to show in the name of implementation. We could very easily lose the dividend due from our rising youth population

My last column had some wishful thinking for the New Year, hoping for tax reform, financial sector reform and changes in how India pursues its global strategy on the ground. These were modest wishes. But perhaps the paramount concern should be what is good for those at the centre of it all: India’s people. In 1955, economist Milton Friedman offered these remarks in a memorandum to India’s Ministry of Finance, “In any economy, the major source of productive power is not machinery, equipment, buildings and other physical capital; it is the productive capacity of the human beings who compose the society.” The implication that “investing in people” is crucial for economic development has continued to rise in importance in policy thinking.

India’s version of this approach has included national missions for education and health, and now a major push to increase the availability of foodgrains. Like many policy initiatives, targeting and implementation have left much to be desired. But the overall goal of investing in people makes sense, and policy corrections can be made. Mothers and infants are getting somewhat better care, but need even more focused attention. More children are coming to school, and being fed there, but they are not learning enough. Many people in India need more calories (see Heather Schofield’s recent study of rickshaw pullers in Chennai), and may get them with the “right to food,” if distribution mechanisms can be made to work.

What else needs to be done? The next step beyond basic health, nutrition and education is that of skilling India’s burgeoning population of young adults. This challenge has not received the same attention as more basic needs, but it will rapidly grow in political and social salience. Of course there is a National Skill Development Policy (NSDP), in place since 2009. There was a target set of skill-building of 500 million Indians by 2022. However, it seems that so far only bureaucratic and regulatory bodies have been created. Part of the problem is that building skills is a very heterogeneous goal: it can include everyone from managers to carpenters, plumbers and technicians. Some skills are very specialised, like nursing. Others are more generic. The National Vocational Education Qualification Framework (NVEQF) takes a stab at defining learning standards, but it is short on detail, does not have the right structure, and lacks any specification of learning outcomes. Remember that this failure to focus on and